They point out that the last Cabinet Secretary Gus O’Donnell received four separate honours for doing his job, while his successor Jeremy Heywood was handed a knighthood on the day before he took up the post.

‘Honours should not be awarded to civil servants or businessmen unless it can be demonstrated there has been service above and beyond the call of duty,’ the report says.

It criticises the lack of transparency in the system, adding: ‘These concerns are not allayed by the speed at which honours are awarded to celebrities and sports stars.’

Downing Street yesterday refused to comment on honours for medallists, saying this was ‘a matter for the independent Honours Committee’.

But privately officials conceded it would be ‘very difficult’ to honour some Olympic champions while ignoring the achievements of others.

MPs also warned of widespread concern that honours could be ‘bought’ in return for political donations, saying this is a ‘significant threat to credibility’.

The report calls for removal of all political involvement, including stripping David Cameron of his role in setting the ‘strategic direction’.

It also cast doubt on a system for bestowing honours on senior politicians, saying control should be wrested away from party whips, and there should be no set quota for politicians.

The Cabinet Office denied honours were dominated by politicians and celebrities, saying 72 per cent of the awards in the last list went to ‘unsung heroes’.

‘Honours are awarded on merit to those who make outstanding contributions,’ it said.

VIDEO: Goodhew: "You can't put a quota on excellence"

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MPs warn David Cameron: 'Don't be so quick to honour Team GB's top Olympic stars'